relating to public administration; modifying provisions governing energy
forward pricing mechanisms for government agencies; amending Minnesota
Statutes 2010, section 16C.143; repealing Minnesota Statutes 2010, sections
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2010, section 16C.143, is amended to read:
1.816C.143 ENERGY FORWARD PRICING MECHANISMS.
Subdivision 1. Definitions.
The following definitions apply in this section:
(1) "energy" means natural gas, heating oil, propane, diesel fuel, unleaded fuel,
any other energy source
except electricity used in state operations
(2) "forward pricing mechanism" means either: (i)
a contract or financial instrument
that obligates a
agency to buy or sell a specified quantity of energy
at a future date at a set price
.; or (ii) an option to buy or sell the contract or financial
1.16(3) "government agency" means the state, the Minnesota state colleges and
1.17universities, the University of Minnesota, a statutory or home rule charter city, a county, a
1.18town, a school district, a regional agency, or another political subdivision.
Subd. 2. Authority.
Notwithstanding any other law to the contrary,
1.20 commissioner a government agency
may use forward pricing mechanisms for budget
Subd. 3. Conditions.
Forward pricing mechanism transactions must be made only
1.23 under the following conditions:
The quantity of energy affected by the forward pricing mechanism must not
90 percent of
the estimated energy use for the
agency for the same
period, which shall not exceed
months from the trade date of the transaction
2.4 (2) a separate account must be established for each state agency using a forward
2.5 pricing mechanism.
Subd. 4. Written policies and procedures.
Before exercising the authority under
this section, the
commissioner government agency
must develop written policies and
procedures governing the use of forward pricing mechanisms.
2.9 Subd. 5. Oversight process. Before exercising authority under subdivision 2,
2.10the government agency must establish an oversight process that provides for review of
2.11the government agency's use of forward pricing mechanisms. The oversight process
2.12must include: internal or external audit reviews in a manner prescribed by the state
2.13auditor; annual reports to, and review by, an internal investment committee; and internal
2.15EFFECTIVE DATE.This section is effective July 1, 2012, and applies to forward
2.16pricing transactions entered into on or after that date.
Sec. 2. REPEALER.
2.18Minnesota Statutes 2010, sections 383B.1588; and 473.1293, are repealed.
2.19EFFECTIVE DATE.This section is effective July 1, 2012. The authority
2.20previously granted by Minnesota Statutes, sections 383B.1588 and 473.1293, is granted
2.21under Minnesota Statutes, section 16C.143, and the repeal of Minnesota Statutes, sections
2.22383B.1588 and 473.1293, does not affect any forward pricing transaction entered into
2.23before the effective date of this section.